Understanding Japanese Employment Contracts
Japanese employment contracts can be complex and confusing, especially for foreign workers who may be unfamiliar with the language and culture. In this guide, we will explore some of the key terms and conditions commonly found in Japanese employment contracts, including information about compensation, working hours, and job security. By understanding these terms and conditions, you can make informed decisions about your employment in Japan and avoid potential misunderstandings.
Compensation
Compensation is one of the most important terms in any employment contract. Here are some key terms related to compensation that you should be aware of in Japanese employment contracts:
● Base salary (基本給, kihonkyu): The base salary is the minimum amount of compensation that an employee will receive each month. This amount is typically determined by the employee’s position, experience, and education level.
● Allowances (手当, teate): Allowances are additional payments made to employees to cover specific expenses, such as commuting costs or housing expenses. The amount of the allowance is typically fixed and may be determined based on the employee’s job duties or location. Here are some of the allowances Japanese companies may offer:
Commuting allowance (通勤手当, tsuukin teate) is an amount of money that is provided to employees to help cover the cost of commuting to and from work.
Housing allowance (住宅手当, jyutaku teate) is an amount of money that is provided to employees to help cover the cost of housing.
Meal allowance (食事手当, shokuji teate) is an amount of money that is provided to employees to help cover the cost of meals.
Overtime allowance (残業手当, zangyou teate): Overtime allowance is an amount of money that is provided to employees for working overtime. In Japan, employers are required to pay overtime allowance at a rate of at least 25% above the employee’s regular hourly wage.
Family allowance (扶養手当, fuyou teate): Family allowance is an amount of money that is provided to employees to help support their dependents, such as children or elderly parents.
● Overtime included in salary (残業配当, zangyou haitou): In some cases, employers may include zangyou (overtime) in an employee’s monthly salary instead of paying it out as a separate allowance. The number of overtime hours included in the monthly salary is determined by the company and in such cases the employee is not entitled to additional overtime pay for this number of hours worked beyond their regular schedule. However, employers are still required to adhere to labor laws and regulations regarding maximum working hours and overtime pay.
● Salary increases (昇給, shokyuu): Salary increases refer to increases in an employee’s base salary over time. In Japan, salary increases are typically based on the employee’s performance and length of service with the company. Some companies may also offer automatic salary increases based on a predetermined schedule.
● Bonuses (賞与, shoyo): Bonuses are additional payments made to employees, usually once or twice per year. These payments are based on the company’s performance and the employee’s individual performance. The amount of the bonus is typically a percentage of the employee’s base salary. Some companies may also offer a special bonus, known as a “summer bonus” or “winter bonus,” in addition to the regular bonuses.
● Severance pay (退職金, taishokukin): Severance pay is a lump sum payment that is made to employees upon termination of their employment. The amount of severance pay is typically based on the employee’s length of service with the company and may be specified in the employment contract or collective bargaining agreement.
Working Hours
Working hours are another important aspect of any employment contract. Here are some key terms related to working hours that you should be aware of:
● Regular working hours (所定労働時間, shotei roudou jikan): Normal working hours are the hours that an employee is expected to work each day, typically from 9:00 AM to 6:00 PM with 1 hour lunch break, but these hours vary depending on the company. Any hours worked beyond this amount are considered overtime.
● Overtime (残業, zangyo): Overtime refers to any hours worked beyond an employee’s normal working hours. Overtime pay is typically higher than regular pay and is determined by a specific formula based on the employee’s base salary and the number of overtime hours worked. In some cases, employees may be exempt from overtime pay if they meet certain qualifications, such as being in a managerial or executive position.
● Rest days (休日, kyuujitsu): Rest days are days when an employee is not expected to work. In Japan, rest days typically include weekends and national holidays. Employers are required to provide employees with at least one day off per week. However, some industries, such as hospitality or retail, may require employees to work on weekends or holidays.
Job Security
Job security is a concern for many workers, especially in uncertain economic times. Here are some key terms related to job security:
● Employment contract (雇用契約, koyou keiyaku): The employment contract outlines the terms and conditions of the employee’s employment, including the duration of the contract and the grounds for termination.
● Employment status (雇用形態, koyou keitai): In Japan, there are several types of employment status and each type of employment status has different rights and benefits.
Regular employment (正社員, seishain): Regular employees work for a company on a permanent basis and typically work a set number of hours each week. They are entitled to various benefits such as social insurance, paid vacation days, and bonuses.
Contract employment (契約社員, keiyaku shain): Contract employees work for a company on a fixed-term contract, usually for a specific project or period of time. They are eligible for the benefits such as social insurance and paid vacation days, but they may not have the same job security as full-time employees.
Part-time employment (パートタイム, paato taimu): Part-time employees work for a company on a temporary or part-time basis and typically work fewer hours each week than full-time employees. They may not be eligible for the same benefits as full-time employees, but they are entitled to certain labor protections such as minimum wage and overtime pay.
Dispatched/temporary employment (派遣社員, haken shain): Dispatched or temporary employees are employed by a staffing agency and are dispatched to work for a client company on a temporary basis. They may not be eligible for the same benefits as full-time employees, but they are entitled to certain labor protections such as minimum wage and overtime pay.
● Probationary period (試用期間, shiyou kikan): The probationary period is a trial period that new employees go through at the beginning of their employment. During this period, the employer can terminate the employee’s contract without cause. The length of the probationary period varies depending on the company and the position.
● Non-compete clause (競業禁止条項, kyougyou kinshi joukou): A non-compete clause is a provision in the employment contract that prohibits the employee from working for a competitor or starting a competing business after leaving the employer.
Conclusion
Understanding the key terms and conditions of your employment contract is essential for foreign workers in Japan. By understanding the language and culture surrounding Japanese employment contracts, you can make informed decisions about your employment and avoid potential misunderstandings. It is important to carefully review your contract before signing and to ask questions or seek clarification if there are any terms that you do not understand. With this knowledge, you can enter into your employment in Japan with confidence and a clear understanding of your rights and responsibilities as an employee.
